Vnesheconombank Chairman V.A. Dmitriev’s Interview to the TV Channel Russia 24

TV Channel Russia 24,
INTERVIEW
25.09.2014, 16:50

News agencies keep on reporting news with a mark “economy” and “urgent” related to Vnesheconombank. For example, the Russian Government is to provide Vnesheconombank with 240 billion rubles as well as news about a new fund to support mono-cities. My colleague Alexandra Suvorova will talk now about all this with Vnesheconombank Chairman Vladimir Dmitriev. Sasha, we are on airnow, I’m giving you the floor. Good evening.

Interview

Correspondent Alexandra Suvorova

CORR.: Good evening Dima. We are now receiving information about VEB’s Supervisory Board meeting here at the White Housefrom the horse’s mouth. Good evening, Vladimir Alexandrovich.

Vladimir DMITRIEV, Vnesheconombank Chairman: Good evening.

CORR.: My first question deals with the recently most discussed issue –VEB’s additional capitalization. On Tuesday, you had a meeting with Dmitry Medvedev. What agreements were you able to reach? Today, the Russian media informed that 240 billion rubles had been extended to Vnesheconombank. How can you comment on the news?

Vladimir DMMITRIEV: In fact, on Tuesday we discussed issues with the Prime Minister, our Bank’s Supervisory Board Chairman. They were related to our Bank’s potential additional capitalization and to providing it with liquidity for it to fulfil its obligations both to its creditors and borrowersunder the credit agreements we had signed. The Bank needs 240 billion rubles to fulfil its obligations to borrowers, above all, Russian borrowers we signed binding agreements with. A decision to provide VEB with various kinds of state support was taken at the meeting for it to fulfil the said obligations. Moreover, we also said that the state should also think about assisting Vnesheconombank in repaying credits and bond issues,maturity of which comes due next yearand the amount is as much as 70 billion rubles. Our request was met with understanding, and after the meeting, we were instructed to consider various forms of state support for Vnesheconombank together with economic bloc ministries and the Central Bank. . But in this case I’d like to stress that we are not after any exclusiveness for our Bank because we are well aware that a whole number of banks are affected by sectoral sanctions and the state can’t help leaving them without support. But the state should help not only banks but also companies for them to avoid negative consequences fortheir financialsustainability and failure to fulfil obligations to their creditors and partners. Our Bank needs additional capitalization to go on funding projects of national importance as well as supporting industrial exports and small and medium-sized enterprises. These are priorities of Vnesheconombank’s strategy up to the year 2020, which we are to submit to consideration by our Supervisory Board. Under this strategy, and in line with the current trends of the Bank’s development, we raise a question of the Bank’s additional capitalization for it to meet key financial sustainability standards and above all maintaining capital adequacy ratio at a level of no less than 10 percent because it is this level that is specified in our credit agreements andEurobond issue prospectuses.An initial amount of support is 30 billion rubles, which we need to maintain capital adequacy ratio next year.We are grateful to the Government for making decisions on converting subordinated loans worth more than 6 billion dollars, whichwere placed on deposits at our Bank, into subordinated deposits. Thus, our capital adequacy ratio is now more than 14 percent and this allows us to enhance our investment activity.

CORR.: You have already mentioned the Bank’s strategy up to the year 2020. What are its main features?

Vladimir DMITRIEV: Our strategy is based on the so-called Vnesheconombank’s modernization development scenario, which provides for expanding our Bank’s participation in nationally significant investment projects. We have already overfulfilled the strategy we planned to implement until 2015 inclusive, so we need to review it. But we believe that despite the problems faced by our country, Vnesheconombank should play the most important role as a development institution, so our strategy provides for increasing our loan portfolio to 2.5-3 trillion rubles in 2020. We intend to increase our support for industrial exports to 750 billion rubles and our support for small and medium-sized enterprises- to250 billion rubles on average. Industrial exports support is in line with the approved RoadMap which is to be implemented by Vnesheconombank and its subsidiary institutions, for example, Roseximbank, which we are to sell in the short term under the presidential directive to our export insurance agency. A credit-insurance center is also to be created. It will operate as a credit factory responsible for supporting Russian exporters. These are our main objectives and priorities and we have already discussed this strategy at a meeting with the Prime Minister. We expect the Government to support our strategy.

CORR.: There have been a lot ofreports in the Russian mediatoday about VEB’s intention to sell Gazprom’s and Rusal’s shares. To what extent are these reports true and realistic?

Vladimir DMITRIEV: It is certainly not true that we are holding talks on this issue with anybody. The reason for these reports is that our Bank and economic bloc ministries have proposed various options to improve our Bank’s financial standing and provide it with additional liquidity.But it must be understood that the price of the assets we purchasedat that time was a lot higher than their current market price. So, Vnesheconombank together with the economic bloc is expected to explore the possibility of selling these assets on a step-by-step basis so that Vnesheconombank does not sustain losses. Thank you.

CORR.: Thank you very much for finding time for the interview.